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Homeowners Insurance Endorsements

Personal Property Replacement Cost Coverage

Property loss settlements under the homeowner’s policy are made on an actual cash value basis. When the replacement cost endorsement is added, the loss settlement payment would be sufficient to replace the item for the cost at the time of loss without deductions for depreciation. Replacement cost means that the items are repaired or replaced with like kind and quality items based on today’s prices. For example: suppose you have an eight-year-old air conditioning compressor that is damaged by lightning and needs to be replaced. Eight years ago, you paid $2,500, but now it will cost $5,000. If your policy has a replacement cost provision, then your insurance company will base the claim payment on the $5,000 cost.

We recommend that all homeowners apply this coverage to their policy.

Personal Property Actual Cash Value Coverage

ACV is defined as the cost to replace the item at today’s cost minus the item’s depreciation. In other words, the amount paid will be based on the item’s life expectancy. To use the same example, suppose the average life span of an air conditioning compressor is 16 years. Since the compressor is eight years old, it has half of its life left. Since the ACV of the compressor is the replacement cost minus the depreciation, the company would pay half of the $5,000—or $2,500.

We do not recommend purchasing a policy with actual cash value coverage.

Water Damage Exclusion

This endorsement is attached to some insurance companies’ policies for older homes. This form excludes water damage subject to the limits, exclusions and conditions listed in the policy from:

· Accidental or intentional discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance.

· Water penetration through the roof system or exterior walls or windows whether/or not driven by wind unless water penetration is a direct result of wind or hail.

Over 85% of the industries claims are due to water damage claims. They are the most common claims outside of hurricanes in our state.

Limited Water Damage Endorsement

Policies with the water damage exclusion may be endorsed to provide coverage for sudden and accidental discharge or overflow of water or steam from within a plumbing, heating, A/C, automatic sprinkler system or from within a household appliance. The limit of liability for all covered property under this option is $10,000.

If your claim is more than $10,000 you will have to pay the additional expense out of pocket.

Screened Enclosure Coverage

Due to the amount of wind risk in Florida, most companies exclude screened enclosure coverage completely or for all wind claims.

However, most companies will allow you to buy back the coverage in increments of $5,000 or $10,000.

Ordinance and Law

When your home has been damaged, the construction, repair or demolition of the damaged property must comply with current ordinances and laws. This can result in higher repair costs. Ordinance and Law coverage provides coverage to bring your house up to the current codes. This coverage is usually 25% of your dwelling amount

Our agency recommends that all homes carry at least some ordinance or law coverage. While it is hard to recommend one amount over another, the state of Florida Office of Insurance Regulation (OIR), recommends a minimum limit of 25% of coverage

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